New Wells Fargo CEO Pushes For Less Regulation In Wake Of Giant Fraud Scandal

3:45 PM 12/06/2016 | Business

Robert Donachie | Capitol Hill and Health Care Reporter

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The new CEO of Wells Fargo, Tim Sloan, urged President-elect Donald Trump to consider making regulatory changes at an industry conference Tuesday morning.

Wells Fargo got slapped with a $185 million fine from the Consumer Financial Protection Bureau (CFPB) in September for issuing 565,000 lines of credit and opening 1.5 million bank accounts for customers without their consent. Bank employees even went so far as to fake email addresses for their customers to sign them up for banking services in order to pad numbers. Some 14,000 of those credit accounts accrued over $400,000 in fees. (RELATED: CFPB Slapped Wells Fargo With $185 Million Dollar Fine)

Wells Fargo management responded by firing 5,300 employees who they blamed for the scandal, but these surface changes were not enough for customers or lawmakers.

Former Wells Fargo CEO John Stumpf faced a congressional investigation and a grilling from Senate leadership. Following the hearings, the board ordered Stumpf to cough up $41 million in assets and earnings he accrued from his decades-long tenure at the bank. The board also cut some mid-level management.

Still unsatisfied, Stumpf announced Oct. 12 he was stepping down as chairman and CEO.

Trump should focus on “one or two” specific regulatory changes, Sloan (Stumpf’s replacement) told those present at the conference Tuesday. Sloan also expressed concern with the Federal Reserve’s review of how much money a bank can give to shareholders via dividend payments. His fears may be fueled by the fact that the bank is still under federal investigation.

Sloan is also critical of the Volker Rule, a regulation within Dodd-Frank restricting banks from betting or leveraging heavily with their own funds–a common practice among banking institutions before the 2007 financial crisis. “We were not big fans of proprietary trading at Wells Fargo, and never really did it,” Sloan told the audience.

Dodd-Frank already costs job-creators more than $36 billion, in conjunction with 74 million hours of compliance paperwork annually.

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